close
KUWAIT: His Highness the Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah chairs the cabinet’s weekly meeting yesterday. — KUNA
KUWAIT: His Highness the Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah chairs the cabinet’s weekly meeting yesterday. — KUNA

Cabinet discusses 5-year plan to harmonize employment

ZURICH: British telecoms giant Vodafone said Friday it has agreed to sell its Italian unit to Swisscom for eight billion euros ($8.7 billion) in a cash deal that was slammed by Switzerland’s main political party. Shares in the two companies jumped following the announcement but the hard-right Swiss People’s Party (UDC) said that investing abroad again was “irresponsible in the highest degree” following heavy Swisscom losses in Germany, Hungary and Malaysia.

The UDC said the strategy of the federal government, as Swisscom’s main shareholder, should be to “ban foreign adventures”. The government, however, gave its green light for the operation on Friday.

Vodafone, which previously rejected offers from French billionaire Xavier Niel’s Iliad group for the unit, has been on a cost-cutting campaign that has included layoffs and the offloading of divisions abroad.

The UK group said it intends to return four billion euros to shareholders following the sales of its Italian and Spanish businesses, which together total 12 billion euros.

Swisscom also said it would reward investors, raising dividends to 26 Swiss francs ($29) payable in 2026, compared to 22 francs in 2023. Vodafone chief executive Margherita Della Valle said the deal with Swisscom marked the “third and final step in the reshaping of our European operations”.

“Going forward, our businesses will be operating in growing telecom (telephone company) markets — where we hold strong positions — enabling us to deliver predictable, stronger growth in Europe,” she said in a statement. Swisscom said in a separate statement that it would merge Vodafone Italia with its own Italian subsidiary, Fastweb, which it bought in 2007.

“Swisscom’s purchase of Vodafone Italy and to merge it with its Italian subsidiary, Fastweb, creates a strong contender in the most challenging telecom market in Europe,” said Mark Diethelm, an analyst at Vontobel. The transaction - which is expected to be completed in the first quarter of 2025 - will be paid in cash and financed by debt. “The industrial logic of this merger is very strong,” Swisscom CEO Christoph Aeschlimann said. “Fastweb and Vodafone Italia are an ideal fit to create high added value for all stakeholders.”

Shares in Vodafone surged more than six percent in London while Swisscom jumped around five percent on the Swiss stock exchange in late afternoon deals.

“Vodafone’s Italian business has been struggling, so shedding this weight should help the group refocus,” said Sophie Lund-Yates, an analyst at Hargreaves Lansdown. “Attention will now turn to how effectively Vodafone uses its resources to fix wider challenges, including high debts, costs and some increasing competition,” she added. Vodafone and Swisscom had announced last month that they were in advanced talks for the transaction. Earlier this year, Vodafone rejected a proposal from Iliad to merge their Italian businesses in a deal valuing Vodafone Italy at 10.45 billion euros.

The British mobile phone operator had already rebuffed an 11.25-billion-euro approach by Iliad and private equity group Apax Partners in February 2022. — AFP

By Hassan T Bwambale World Animal Day is an international day of action for animal rights and welfare celebrated annually on October 4. It serves as an opportunity for organizations and individuals to unite in making animal welfare a global priority...
A law professor asked his students about the most important trait a judge must possess. Each student responded with what they believed to be the most crucial trait: Some said wisdom, others knowledge, and a third group chose credibility. However, on...
MORE STORIES